A man holds a sign directing people to an insurance company where they can sign up for the Affordable Care Act, also known as Obamacare in Miami, Fla in 2015.
Photo by Joe Raedle/Getty

Trump moves away from ‘Obamacare’ sabotage (for now)

Donald Trump’s plan to repeal and replace the Affordable Care Act with a far-right alternative hasn’t gone especially well, but if the Republican White House was determined to sabotage the health care system, it has a variety of options available.

The New York Times reports, however, that Team Trump is, at least for now, taking one of the most potent options off the table.
The Trump administration says it is willing to continue paying subsidies to health insurance companies under the Affordable Care Act even though House Republicans say the payments are illegal because Congress never authorized them.

The statement sends a small but potentially significant signal to insurers, encouraging them to stay in the market.
This stems from a lawsuit GOP lawmakers filed a few years ago, when they were still trying to tear down “Obamacare” through the courts. As longtime readers may recall, the details of the case get a little complicated, but let’s quickly review for those who may need a refresher.

Much of the federal spending associated with the ACA goes to subsidizing insurance, but some of the costs go towards “cost-sharing reductions” to help families with their deductibles and co-payments. The reform law caps how much low-income consumers have to pay for these health expenses, reimbursing part of the costs to the insurance companies.

Republicans, insisting that the funds weren’t explicitly allocated by Congress, thought they might be able to crash the insurance markets by using the courts to scrap the subsidies, making it vastly more difficult for struggling families to pay for their medical care.

Nearly everyone thought the lawsuit would fail – the Republicans’ own attorneys dropped the case twice – but the case ended up before a Bush/Cheney appointee who actually ruled in the GOP’s favor, though the decision was put on hold pending an appeal.

And this, in turn, left the Trump administration with an opportunity: if the White House decided not to appeal, the ruling would stand, the cost-sharing reductions would end, millions wouldn’t be able to afford care, and the ACA markets would unravel. In other words, Republicans could’ve used this ruling to sabotage the law they claim to hate.

We now know, however, that the White House has decided not to exploit this opportunity, at least not yet, reducing some of the uncertainty facing insurers.

In fact, the New York Times quoted some key GOP lawmakers who now want to approve the funding that House Republicans sued to stop.
Two influential Republicans – Representatives Tom Cole of Oklahoma, the chairman of the Appropriations subcommittee responsible for health spending, and Greg Walden of Oregon, the chairman of the Energy and Commerce Committee – said Congress should appropriate money for the cost-sharing subsidies.

“I don’t think anybody wants to disrupt the markets more than they already are,” Mr. Cole said in an interview. “It’s a very unstable market.”

Asked if he thought Congress should provide the money, Mr. Cole said, “My personal opinion is yes.”

Likewise, Mr. Walden said last month, “I will do everything I can to make sure that the cost-sharing reduction payments get made.” That, he said, is “an obligation we have not only to the insurers,” but also to consumers, and “we cannot leave them high and dry.”
That’s kind of amazing. When Republicans thought they could gut the ACA and leave the Obama administration – and millions of families – in a bind, they were eager to push their scheme forward. But now that GOP officials are running the government, and they realize that the public would blame Republicans for destroying the system most of the country now likes, conservatives are suddenly in a less destructive mood.

On the contrary, the Trump administration has effectively told insurers to stick around for a while, confident in the (relative) stability of the markets.

The president and his team have other sabotage options, but this was the biggest and most immediate. The fact that Trump isn’t pursuing it is an important win for the system. The president may be convinced that the ACA is collapsing – it’s not, though he keeps saying otherwise – but he’s passing up an opportunity to turn this rhetoric into a self-fulfilling prophecy.

Affordable Care Act, Donald Trump, House Republicans and Obamacare

Trump moves away from 'Obamacare' sabotage (for now)